Renault-Nissan drops out of bidding for Korea's Ssangyong as selection nears

Ssangyong received protection from creditors in February 2009 after rising oil prices and the global recession squeezed sales of its mainstay SUVs.

(Bloomberg) -- The Renault-Nissan alliance dropped out of bidding for Ssangyong Motor Co., the South Korean carmaker in bankruptcy protection, as a court official said the preferred buyer may be named today.

“Following a review of the Ssangyong business opportunity, Renault Samsung and Nissan have decided to pursue other options for their business expansion in Korea,” said Caroline De Gezelle, a spokeswoman for Renault SA. The decision was made for “several reasons,” she said, declining to elaborate.

Ssangyong received protection from creditors in February 2009 after rising oil prices and the global recession squeezed sales of its mainstay SUVs, resulting in a cash shortage. The preferred bidder for a controlling stake in Ssangyong may be announced as soon as Wednesday, Seoul Central District Court spokesman Ko Hong Seok said.

Of six potential buyers already shortlisted, three have made firm offers, MoneyToday reported, without citing anyone. The online newspaper identified them as South Korea-based YoungAhn Hat Co. and two Indian companies, Mahindra & Mahindra Ltd. and Ruia Group.

Ssangyong spokesman Chung Mu Young, Mahindra spokeswoman Roma Balwani and an official at YoungAhn declined to comment on the report. Ruia spokesman D.J. Nandi didn't answer a phone call. Ruia and Mahindra, India's largest SUV maker, had both said previously that they would make bids.

Buying Ssangyong would offer access to Asian and Russian markets, sale advisers Samjong KPMG Advisory Inc. and Macquarie Group Inc. said in the bid-tender documents. The automaker picked six bidders in June to undertake due diligence, out of seven groups that had expressed an interest.

Ssangyong sold 43,881 vehicles, including 26,190 that it exported, in the first seven months of this year, compared with 13,091 deliveries a year earlier, when production was disrupted for 77 days by workers' strikes over job cuts.